The euro zone economy shrank a big 2.5% in the first quarter, and 4.6 for the year led by a drop in output in Germany.

The European Union’s statistics office Eurostat said on Friday the gross domestic product economy of the 16 countries using the euro shrank 2.5 percent quarter-on-quarter for a 4.6 percent contraction year-on-year — the worst on record. This followed a 1.6 percent quarterly and revised 1.4 percent annual contraction in the last three months of 2008.

It was the biggest fall ever in the zone

Economists had expected a 2 percent quarterly fall in output and a 4 percent annual contraction, marking the low-point of the worst recession in Europe since World war Two.

“We expect Q1 to be the trough of the recession across the area,” Unicredit bank said in a research note.

The whole of the 27-nation European Union also saw its GDP fall 2.5 percent on the quarter and 4.4 percent year-on-year.

Europe’s biggest economy, Germany, led the plunge with a 3.8 percent quarterly fall and a 6.9 percent annual drop, caused by a collapse in exports and investment.

France, Europe’s second biggest economy, had a fall of 1.2 percent on the quarter and Italy, the next biggest economy, Italy had a fall of 2.4 percent.

Eurostat also confirmed euro zone inflation in April was unchanged at 0.6 percent year-on-year, in line with its earlier estimate and as expected by markets, after prices increased 0.4 percent month-on-month.